Border Tax Adjustment Analysis
Understanding the Economic and Business Implications of a Border Tax Adjustment
A push toward greater trade protectionism is expected from the new administration in Washington. One cornerstone policy being promoted is a border tax adjustment that would “penalize” imports, while rewarding exports. Oxford Economics is expertly placed to examine how these adjustments could affect overall macro-economic growth as well as its potential impacts on individual industry sectors. As these protectionist policies could disrupt global supply chains, we can also assess the impact of such policies on organization-specific supply chain risks and vulnerabilities.
Not all disruptions are created equal, however. Foreign market retaliation could create more disruption if bilateral trade deals are not struck – the classic concerns in a “trade war.” Moreover, some industrial sectors and regions within the US will likely be more adversely affected than others. Multi-national companies with more complex and globalized supply chains may be significantly more vulnerable to the impacts of BTAs, for example.
Oxford Economics economists and consultants are well equipped with the modeling tools and capabilities to identify the specific effects of proposed BTAs. We can track how changes in protectionist measures would impact: national economies, industry sectors and, through collaborative engagement, your organization. Our modeling will also allow for sensitivity checks and deeper understanding of the volatility of BTAs in the wake of retaliatory responses.
Results can be presented in the form of:
- Changes in GDP
- Exchange rate adjustments
- Supply-chain effects & risks
- Changes to sector revenue/ productivity,
- Changes in jobs
- Changes to taxes
- Geographic display of disruption
Employing our wider Thought Leadership expertise, we can help your organization develop a narrative around the numbers, to help explain the impact of various policy proposals on stakeholders and the wider public. By developing case studies, conducting fieldwork and interviewing business leaders we can examine issues such as:
- To what extent would BTAs revive manufacturing in key sectors?
- How effective would be BTAs prove in reducing inequality in key economies?
- How would higher trade barriers affect the consumer experience and consumer prices?
- How able are global manufacturers to change their supply chains to take into account the impact of BTAs?
- To what extent can foreign-sourced components be replaced with domestic supplies? Are their bottlenecks in terms of workforce and talent and how can they be addressed?
- What actions should policy-makers and business leaders consider in preparing for these shifts?
We would be happy to connect with your organization to better understand your interest in modeling the effects of trade on industry sectors and/or the economy or to produce white papers or briefing papers that analyze the impacts of a BTA on your region or industry.
Please fill out the form below for more information or to request a proposal.